Welcome to Part 9 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at taxpayer penalties for filing (and paying) late, assessments on tax pros and how unpaid taxes could limit international travel. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that... Read more →
It's no secret that COVID-19 wreaked havoc on the 2020 tax filing season. In addition to law changes and a delayed mid-summer filing deadline, previously implemented Internal Revenue Service precautions like shutting down offices are continuing to cause problems. Those closures likely helped prevent coronavirus infections among IRS personnel, but they also produced a massive mail backlog, estimated at one point by none other than the agency's commissioner at more than 12 million pieces of U.S. Postal Service material. Those snail mail envelopes included tax payments. But since they weren't opened, the IRS didn't account for them and its automated... Read more →
Soldiers from the Louisiana National Guard responding after Hurricane Laura destroyed much of Lake Charles. The Capital One Tower was among the properties severely damaged by the category 4 storm. (Photo by Josiah Pugh via Flickr/Wikipedia Commons) Hurricane season 2020 is almost over and Nov. 30 cannot get here soon enough for Louisiana residents. The Pelican State was pummeled by five storms this record-breaking year, including a category 4 which produced the strongest cyclonic wind speeds ever recorded in the state. So state officials are giving folks who are still trying to rebuild in the storms' wakes a chance to... Read more →
Welcome to Part 8 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at the tax considerations of U.S. taxpayers living and working abroad. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021.... Read more →
Among those who need to pay particular attention to this coronavirus money deadline are some college students, families who get government benefits and homeless individuals. If you didn't get a COVID-19 economic relief payment or didn't get all to which you were entitled, you can still apply for the financial help this year. But act soon. Really soon. The deadline to let the Internal Revenue Service know you're due some of the relief money is 3 p.m. this coming Saturday, Nov. 21. Note not only the date but also the time. That's 3 p.m. Eastern Standard Time, not your local... Read more →
As we continue to deal with the coronavirus pandemic, everyone is thinking about masks. The Internal Revenue Service, however, has been working on masking rules for a while and, coincidentally in this year of COVID-19, has taken steps to offer added protection for taxpayers. The IRS masks are not literal covers. In fact, they lessen, not add. But the reductions will mask — that is, make it more difficult to see — personal and business identification numbers and information on common tax documents. And that should help reduce tax identity theft. Last four Social Security digits: This summer, the IRS... Read more →
The coronavirus pandemic has created challenges for Internal Revenue Service's law enforcement branch, but also was part of its successes during the last fiscal year. During the 2020 accounting period, which started Oct. 1, 2019, and ran through Sept. 30, 2020, the IRS' Criminal Investigation (CI) Division initiated nearly 1,598 investigations and identified $2.3 billion in tax fraud schemes. Some of those investigations were into COVID-19 related illegal activity. "Unfortunately, criminals don’t stop committing crimes just because there is a national health emergency. In fact, some criminals pounce on the opportunity to take advantage of others as well as government... Read more →
It's no surprise that bad people take advantage of bad situations. That's why as we continue to cope with COVID-19, pandemic-related scams — tax and otherwise — proliferate. The latest coronavirus tax scam arrives via a text message. COVID-19 text scam warning: It was created by thieves who are trying to trick people into disclosing bank account information under the guise of receiving the $1,200 COVID-19 Economic Impact Payment (EIP), according to the Internal Revenue Service and its Security Summit partners. This scam's text message tells recipients: "You have received a direct deposit of $1,200 from COVID-19 TREAS FUND. Further... Read more →
Remote work has been among the many COVID-related challenges of 2020. Many employees have appreciated the added flexibility and no commute. Those who aren't that social say they've been more productive since they haven't had to spend time schmoozing with coworkers and bosses. The experience has many workers and companies exploring whether widespread working from home will — or should — continue once the coronavirus pandemic is under control. It's also raised tax questions, including an intriguing and unexpected one. A major European bank says that employees who work from home (WFH) should pay for the opportunity via a new... Read more →
Of course 2020 has multiple Fridays that fall on the 13th of the month. The year's first was on March 13, right when as a nation we were realizing that COVID-19 would define everything about this year, and beyond. Back then, I offered 13 good luck tax breaks. Today, Friday, November 13, 2020, arrives as we're dealing with a resurgence of the coronavirus. So it seem appropriate to revisit that first list of 13 tax opportunities that could ease some of your tax fears on this traditional day of superstitions, while we're in the midst of a pandemic and beyond.... Read more →
Welcome to Part 7 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. Today's post looks at next year's changes to Alternative Minimum Tax (AMT) calculations, as well as Social Security and nanny tax changes. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this... Read more →
Photo by Wyatt via Pexels.com When the clock struck 11 a.m. on Nov. 11, 1918, it marked the armistice between World War I's Allied forces and Germany, ending the fighting on the Western Front. The commemoration to honor the 4.7 million Americans who served — and the 116,500 who died — in what then was called the Great War originally was celebrated as Armistice Day. That name and the annual ceremonies continued in the United States until 1954. That year the Nov. 11 commemoration was to Veterans Day and its scope widened to honor veterans from all eras. But even... Read more →
Students at all levels are facing COVID-19 classroom challenges. Older students (and their parents) also are facing college costs, which can be covered in part with financial aid. (Photo by Julia M Cameron via Pexels.com) 2020 has been challenging year for all students and their parents. Moms and Dads with K-12 kiddos have been doing double (or more) duty as teachers where schools have shifted to full or hybrid remote classes as a coronavirus pandemic precaution. It's not much easier when the youngsters are older. Many young adults who've been away at college or were looking forward to going are... Read more →
To spend your retirement the way you want, you need to build your nest egg. The IRS has made changes to required withdrawal amounts that should help those Golden Years funds grow more and for longer. If you've been saving for retirement, then you likely are as jazzed as I am about a provision of the Setting Every Community Up for Retirement Enhancement Act of 2019, or SECURE Act. This law, which took effect this year, gives all us owners of tax-deferred retirement savings accounts an extra year and a half before we must start taking out some of the... Read more →
Millions of Americans still are without jobs. Money from the first COVID-19 economic relief package is long gone. And there's no telling when (or if) Congress might approve more pandemic stimulus. And on top of paying rent or feeding families, some people are facing an added and intimidating bill. They owe taxes to Uncle Sam. The Internal Revenue Service has long heard cries of poverty from folks with large tax bills. In response, the tax agency has instituted systems to work with financially strapped taxpayers. When the pandemic complicated every aspect of everyone's lives earlier this year, the IRS created... Read more →
Voters' voices literally matter each election when initiatives are on ballots. Here are results of some tax questions that were decided by the 2020 electorate. Vice President Joseph R. Biden today was declared president-elect of the United States. It took longer than usual, but that part of Nov. 3 (Donald J. Trump legal challenges notwithstanding) is over. Decisions on the myriad ballot questions that also went before voters across the county on the first Tuesday of November came a bit sooner. Here's a quick look at the results of the tax initiatives in the order they were featured in my... Read more →
Photo by Erik Mclean via Pexels.com Will the lame duck Congress finally give struggling individuals and businesses a second round of COVID-19 economic relief? That ultimate answer could be as confusing and convoluted as the election aftermath we're now watching play out in key presidential election battleground states. That Capitol Hill action is being anxiously awaited by individual taxpayers who've lost income during the pandemic, as well as by small business owners looking for a legislative tweak to make the coronavirus loan help they did get more palatable at tax time. Early relief was easy: The first relief measure, the... Read more →
Welcome to Part 6 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at how the annual changes help investors, high-earners and, eventually, estate heirs. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15,... Read more →
Welcome to Part 5 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In today's post, we look at changes to some popular tax-related medical matters. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021. Medical issues have... Read more →
Welcome to Part 4 of the ol' blog's series on 2021 tax inflation adjustments. We started with a look at next year's income tax brackets and rates. That first item also has a directory, at the end of the post, of all of next year's tax-related inflation updates. In In today's post, at changes to tax credit, deduction and income exclusion amounts. Note: The 2021 figures in this post apply to that tax year's returns to be filed in 2022. For comparison purposes, you'll also find 2020 amounts that apply to this year's taxes, due April 15, 2021. Deductions are... Read more →